Gazprom certain LNG from new plants will find buyer
YUZHNO-SAKHALINSK. Sept 23 (Interfax) - Gazprom feels that on the global market there is still a niche for products from the future liquefied natural gas (LNG) plants of the Russian gas monopoly.
Qatar still has not lifted its moratorium on increasing LNG production, much-discussed projects in Mozambique are still not being implemented, therefore Gazprom sees a window of opportunity for itself for the sale of LNG in ten years. "And our LNG projects could easily enter this window, even without getting scratched," Gazprom Deputy CEO Alexander Medvedev said during the Oil and Gas of Sakhalin 2014 conference.
Medvedev said that policy of Asian consumers, which are opposed to concluding contracts for purchasing LNG pegged to oil, could lead to an LNG shortage and a rise in prices for it.
He said such a policy will lead to a situation where investment decisions are not being adopted on the construction of LNG plants in Australia and Africa, but only in the United States, but U.S. LNG is not enough to satisfy consumers on the market.
Medvedev said that Asian LNG imports are trying to tie prices to the U.S. Henry Hub spot trading platform, however, more and more analysts are forecasting a rise in prices on this market.
"The reason is the high cost of sales for the production of shale gas. Now production is possible only because methane in the U.S. is actually a by-product of oil production, which is more cost-effective than shale gas production. It is no accident that in the U.S. people are lobbying for the lifting of restrictions on oil exports, because the domestic price of oil is no longer offsetting the hidden subsidies for shale gas production," he said.
Medvedev also expressed skepticism regarding the establishment of a physical gas hub on the Asian market, because for this there should be realistic conditions - the possibility of quickly delivering gas from various sources and the possibility of distributing that gas to different places.
"Therefore this still remains only a theory," he said.
